The origin and rise of capital

While to-day, in the domain of natural science, the theory of evolution is generally accepted as the basis of research, the reverse is the case in the field of political economy. The reason is that natural evolution can be “squared” with individualism, but social evolution cannot. Natural organic development can admittedly be evolutionary without interfering with the “God-and-creation” idea which attributes the privileged position of the few to Omnipotent favour. Social development along evolutionary lines must, if logically and persistently traced, demonstrate more clearly that all men are social products and economic positions, therefore, merely the result of necessity and not of choice.

While orthodox political economy at the bidding of the possessing class, is at all times concerned to prove that capital and wage labour have existed through all history, the historic and economic teachings of Karl Marx, particularly the “Materialist Conception of History” and the “Theory of Surplus Value,” supply ample evidence that capital and wage-labour are conditions of a social system of production forming but a comparatively small link in the great chain of social evolution.

In the “seventies” and “eighties” the orthodox political economists who set out to demolish the “pernicious” theories of Marx had not yet acquired the craftiness of present-day “economic experts”, and therefore contented themselves with mere fairy tales to explain the origin of capital and wage-labour. Thus Wilhelm Roscher, professor of political economy at the University of Leipsic (until his death in 1894) wrote (Principles of National Economy, Stuttgart, 1874., Vol, I. p. 423) : “Let us imagine a fisher folk without private property and capital, naked and living in caves, gaining their sustenance by catching with their bare hands sea-fish left behind by the tide in pools on the shore. All workers may here be of an equal standing, each catching and consuming 3 fishes a day. Now a wise man limits for 100 days his consumption to 2 fishes a day and uses the 100 fishes accumulated in that way to devote his labour-power for 50 days to the production of a boat and a fish-net. With the aid of this capital he commences in future to catch 30 fishes a day,”

To-day, at the beginning of the twentieth century, however, the origin of and justification for the employment of capital are no longer ascribed by the economic prize-fighters of capitalism to the thriftlessness and laziness of the many and the thrift and industry of the few. No, the mighty annihilators of Marxian theories of the Mallock school have to their own satisfaction, adopted the more profound explanation that it is the “directive ability” of the few and not the mere labour of the workers which creates the greater portion of capital and is the most important factor in wealth production; and, strange to say, they draw the deduction that this factor can be and is supplied by the capitalist class alone. But European history from the 14th century explains the primitive accumulation of capital in quite a different way. Some bourgeois historians have described it from the standpoint essential to the glorification of capitalism. It was left to Karl Marx to explain it from the standpoint of the proletariat.

The literary advocates of the bourgeoisie at times described the rise of capitalism correctly in order to impress upon the workers the bourgeois standpoint that the struggle of capitalism against feudalism was a struggle against tyranny and privilege – a fight for liberty and equality. These capitalist scribes then rightly point out that industrial capital could not rise without “free” workers – workers who had ceased to come under the domination of chattel-slavery, serfdom, or the craft-guilds. They also emphasise the fact that capitalist wealth production had to be freed from the fetters of feudalism, from the clutches of the feudal lords. Socialists have no reason to detract from the importance of that struggle, considering that the capitalist class are most anxious to deny its character when they hear us now proclaiming the need for social revolution.

While a number of bourgeois writers contributed considerably to the records of the history of primitive accumulation, it was left to Marx and his life co-worker, Engels, to point out its significance from the working-class stand-point. It was they who laid stress upon the fact that this accumulation spelt the creation of the proletariat and of capital itself. Marx, having already given in The Poverty of Philosophy some indications of the conditions that in England – the motherland of capitalism – prepared the way for primitive accumulation, furnished a full and lucid history of it in his great work, Capital.

That fascinating history teaches us that, apart from the craft-guilds in the towns, the greatest hindrance to the rise of capital was the common ownership in the soil by village communities. While such property existed proletarians in large numbers were impossible. Fortunately for capitalism, its development was considerably assisted by the feudal nobility. After the Crusades the production of and commerce in commodities, developed by leaps and bounds, increasing greatly the demand for goods made by the craftsmen and sold by the merchants of the towns for money. The feudal nobility, dependent for their existence upon the direct services of, or goods supplied by, their peasant dependents, began to develope a craving for money. The military power of the towns and princes precluded all possibility of robbing or extorting money from the merchants or craftsmen, while the very poverty of the peasants did the same in their direction. Hence they determined to become producers of commodities like the townfolk – to produce wool, corn and other products for money instead of for their own use only.

Such a change could only be brought about at the expense of the peasantry. These, reduced to serfdom, could now be driven from their homesteads, which were added to the adjacent territory of their lords and masters. And to complete the ruin of the peasants, the communally owned land of the villages standing under the suzerainty of the feudal lords, was turned into the latter’s private property. At that time wool was much in demand by the textile undertakings of the towns. But the extension of wool production necessitated the turning of arable land into sheep runs. To accomplish this end a great number of peasants were driven from their farms by legal or illegal means, that is, either by economic compulsion or by the use of physical force. (For confirmation of Marx’s statements on these points see H. de Gibbins’ Industrial History of England, pp. 40-57.) With the growth of the textile industry the number of expropriated and evicted peasants increased continually. Besides, the nobility dissolved their retinues, which had under the changed conditions ceased to be a source of power, but on the contrary had become a decided source of financial weakness. The Reformation, too, favoured the rise of capitalism by depriving the old sub-tenants of their holdings of Church property, driving them out, in order to hand the same over, almost for nothing, to speculating farmers and citizens, thus forcing these sub-tenants, like the inmates of the suppressed monasteries, into the proletariat. (See de Gibbins’ Industrial History of England, p. 83, for confirmation on this point.)

By such means a large proportion of the country population was divorced from the soil, from their means of production, with the result that an army of proletarians was created – proletarians compelled, in order to live, to sell their labour-power to the highest capitalist bidder. The feudal lords were thus instrumental in paving the way for agricultural commodity production on a large scale, while at the same time supplying the capitalists of the towns with the wage-workers they so urgently needed.

The consequence of the wholesale expropriation of the peasantry in the 15th and 16th centuries in Western Europe, was general vagabondage, which threatened to overwhelm society, and, as a deterrent., cruel and heartless punishments were meted out to vagabonds and paupers, such as whipping, branding, slicing off ears, and even death. Marx sums up the horror of this treatment as follows (Capital, p. 761) :

“Thus were the agricultural people first forcibly expropriated from the soil, driven from their homes, turned into vagabonds, and then whipped, branded, tortured by laws grotesquely terrible, into the discipline necessary for the wage system.”

But while more workers were thus set “free” than capital could employ, the supply of efficient workers fell behind the demands of capital, as during the period of actual manufacture proper, which led to a division of manual labour, production depended upon workers who had gained a certain proficiency (in many cases taking years to acquire) in the various part processes. Besides, much more capital was needed for wages than for tools and materials. Hence with the accumulation of capital the demand for wage labour grew rapidly, while the supply of competent workers proceeded in much slower ratio. Skilled workers were very scarce, and in great demand. The fact that they still retained the high notions of handicraftsmen made the wage-workers during the infancy of capitalism independent, defiant and often rebellious against the hard discipline and wretched monotony of capitalist production. Therefore, to obtain submissive workers, the capitalists had to introduce the same powerful authority by whose aid the peasants were expropriated, the land made private property, and the vagabonds and paupers tortured and murdered – the authority of the State. The most stringent legislation was enacted to fix a maximum wage, extend the working day, and prohibit combination of the workers. (See Capital, Karl Marx, pp. 761-765; also Industrial History of England, de Gibbins, pp. 71, 106 and 118.)

And how hypocritical was the cry of liberty, fraternity and equality of the French industrial capitalists at the time of the French Revolution was proved by the fact that as soon as they had conquered political power (mainly by the assistance of the workers) these “just” people instituted a bitter campaign for the abolition of the remainder of common land and for the strictest prohibition of any kind of labour combination. (Capital, pp. 765-6.)

The foregoing historical survey explains how the proletariat, and subsequently a “surplus” number of wage-workers, were created and how they made possible the development or capitalism, which in its turn reproduced to an ever larger extent the proletariat and a “surplus” of wage-workers. Another important question remains: whence originated the wealth which provided the nucleus of industrial capital? The usurers’ and merchants’ capital inherited from ancient society played an important part in the middle ages. Ever since the crusades commerce with the near and far East had expanded, with the result that the merchants’ capital had become concentrated in few hands. But usury and commerce were not the only sources which supplied the nucleus of industrial capital. Readers desirous of an explicit exposition of the historical development bearing on this point should study the brilliant chapter relating to primitive accumulation in Marx’s Capital. Here a quotation from that work (p. 775) summing up the various methods of this accumulation must suffice:

“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s Anti-Jacobin War, and is still going on in the opium wars against China, etc.

“The different moments of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But, they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power.”

The foregoing brief outline of the brilliant history of the origins of capital demonstrate beyond doubt that primitive capital was the result of robbery, murder and rapine, and that therefore it is only to be expected that the orthodox political economists, the cat’s-paws of the capitalists, should lie and shuffle to the utmost degree in order to prove that capital is the outcome of thrift and industry, or the result of the “directive ability” of the capitalists. And there is no reason for surprise in the fact that, in the face of the overwhelming evidence as to the origin and development of capitalism furnished by Marx, the present orthodox school is averse to accepting the theory of evolution as the basis of its research. For pinned down to the glaring facts of history, it loses every vestige of argument against Marx’s theory of value and his explanation of the origin of capital. Unfortunately the misreprersentations and lies levelled by the bourgeois economists, politicians and diplomatists against the sound and irrefutable teachings of Marx, are still swallowed without much hesitation by the workers of this country. But we Socialists, as evolutionists and revolutionists, know that the failure of the capitalist quack remedies for the great social evils of to-day, must, in the long run, convince the bulk of the proletariat that their salvation is to be found in Socialism alone.